Motor insurance premium will become more expensive from next
month, with the insurance regulator allowing up to a 20 per cent increase in
third party rates in view of rising inflation and the history of claim
settlement.
“The overall percentage increase in the motor third party
portfolio works out to 18.9 per cent. The above rates will be effective from
April 1,” the Insurance Regulatory and Development Authority (IRDA) said in a
notification.
Charges for third party cover will go up for two-wheelers,
passenger cars and commercial vehicles.
For passenger cars not exceeding engine capacity of 1,000cc,
the revised premium is proposed to be hiked 20 per cent to Rs 941 per annum.
For two-wheelers exceeding 350cc, the premium will go up 18.30 per cent to Rs
804.
For goods carrying vehicles, excluding three-wheelers, with
carriage capacity exceeding 40,000 kg, the premium will be Rs 15,035 per annum.
There is no increase for three-wheelers used to carry
passengers for hire with carrying capacity not exceeding six people.
In case of four-wheelers carrying more than six passengers,
the increase is to the extent of 20 per cent from the existing level.
The earlier hike, which was done in March 2012, was disputed
by a transporters’ association, which had fought a legal battle against the
IRDA and general insurers in Calcutta High Court.
However, after eight months of litigation, the court had
passed a verdict in favour of the hike.
Hike assurance
Earlier in 2012, while asking general insurers to hike the
provisioning — capital to be set aside to pay the future claims as it takes
years to settle claims under this category — against the third party motor
portfolio, the IRDA had assured them that it would allow a hike in third party
rates gradually.
The IRDA had dismantled the third party motor insurance pool
from April 1, 2011 thereby linking premium rate with the prevailing market
rate.
